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TMI Blog2011 (5) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Vs. Eli Lilly & Co. (India) Pvt. Ltd., (2009 -TMI - 32752 - SUPREME COURT) - Assessee could not be declared as assessee in default under Section 192 read with Section 201 of the Act for the relevant period. X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 201 (1) and 201 (1A) of the Act on 16th December, 1999 for the Financial year 1988-89 to 1998-99. The AO did not accept the claims of deduction and made additions by working out the difference of additional tax and interest taking into account (i) number of work days outside India (ii) Citizen tax and (iii) Housing norm. On appeal before the Commissioner of Income Tax (Appeals) it was held that citizen tax is a statutory levy in Japan on Japanese citizens and that such tax constitutes an overriding charge on the salary income and therefore the same had to be excluded in computation of taxable income. On the issue of assessee being held to be in default u/s 201 (1) and 201 (1A) and housing norm deduction, the matter was decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st batch, it agitated the citizen tax issue and in the 2nd batch, it challenged the issue of limitation. The Supreme Court vide orders dated 16th March, 2008 in the 1st batch of appeals directed the Tribunal to consider the matter afresh in accordance with law as regard citizen tax issue. It would be pertinent to quote the exact direction given by the Supreme court in the aforesaid order as much turns on those directions:- "Without going into the merits of the case, suffice it to state that in the present case, in our view, the Commissioner (Appeals) ought to have examined the scope of the Japanese law, namely, Citizens Individual Inhabitant Tax Act. In the letter of appointment issued, there is a reference to the words. The relevant Clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act) of Japan and analyzing those provisions. Since the scope of aforesaid Japanese law was not examined, the Supreme Court remitted the case back to the Tribunal for fresh consideration "in accordance with law" and to ascertain from the provisions of the Citizens Tax Act as to whether the statutory levy in Japan constituted an overriding charge. The Supreme Court made it clear that if it was an overriding charge, then it would not be an income. 3. When the matter reached back to Tribunal, the parties were directed to place on record copy of the aforesaid Citizens Tax Act duly translated into English vide orders dated 16th March, 2009. The Counsel for the assessee filed the copy of the aforesaid Act alongwith its English translation bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1A) of the Act. From this, the Tribunal concluded that it would be a futile exercise to determine the issue namely whether the Citizens Tax Act had an overriding charge over the salary income of the assessee or not. 4. In so far as first reason given by the Tribunal is concerned, no doubt, the Tribunal felt helpless to determine the issue as per direction of the Supreme Court for no fault of its own. Normally, in such a situation, it could have asked the other party namely the assessee to approach the Supreme Court for variations of the directions given by the Supreme Court in its order dated 16th March, 2009 inasmuch as, the Tribunal is bound to carry out such directions. However, if the second ground given by the Tribunal has merit, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that the orders passed under Sections 201(1) and 201(1A) of the Income Tax Act, 1961 are invalid and barred by time having been passed beyond a reasonable period." Having heard learned counsel on both sides, we are of the view that, on the facts and circumstances of these cases, the question on the point of limitation formulated by the Income Tax Appellate Tribunal in the present cases need not be gone into for the simple reason that, at the relevant time, there was a debate on the question as to whether TDS was deductible under the Income Tax Act, 1961, on foreign salary payment as a component of the total salary paid to an expatriate working in India? This controversy came to an end vide judgment of this Court in the case of Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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